In ruling for Skilling and Black, the high court, in opinions by Justice Ruth Bader Ginsburg, found fault with a federal law that gives prosecutors the authority to bring cases against executives who deprive companies of their honest services.

The ruling could have a significant impact on some white-collar crime prosecutions. The honest-services law has been a darling of government lawyers because it is broadly worded and gives them room to prosecute a wide range of conduct.

Ginsburg said the honest-services law should be confined only to cover fraud schemes involving bribery and kickbacks. Ginsburg said parts of Skilling’s conviction were flawed, but said the flaws did not necessarily require reversal of his conviction on conspiracy charges.

Today, in Skilling v. U.S., the Supreme Court invalidated the use of the honest services fraud statute except in cases involving bribery and kickbacks.

Citizens for Responsibility and Ethics in Washington (CREW) had filed an amicus brief on behalf of the United States in the related case of Black v. U.S. urging the Court to uphold the honest services fraud statute in cases in which the public has been deprived of the intangible right of government officialsÃ¢â‚¬â„¢ honest services. The Court rejected this argument, finding that such an application of the statute is unconstitutionally vague.

CREW executive director Melanie Sloan said, “TodayÃ¢â‚¬â„¢s decision deprives prosecutors of an important tool in their efforts to fight public corruption. Previous convictions may be vacated and corrupt officials will have an easier time escaping accountability for their misdeeds.Ã¢â‚¬Â Sloan continued, Ã¢â‚¬Å“Anticipating this ruling, CREW has been advocating a legislative fix. Federal law currently prohibits executive branch employees from taking any official action that affects their personal financial interest. This statute could easily be extended to cover members of Congress and state and local officials to ensure Americans are protected from government officials who sacrifice the public interest for their own private gain.”

Skilling and Enron Founder Kenneth Lay hid company losses and hyped the stock’s value while selling their own shares on the sly as the massive energy empire crumbled.

Thousands of people lost their jobs and life savings when Enron collapsed. The ensuing scandal undermined faith in corporate America and led to a massive stock market sell-off.

Followed by other mega scandals — the collapse of WorldCom, excesses at Tyco — Enron led to significant regulatory changes.

The case was also one of the most complex involving corporate crime in US legal history and represented a high-profile test for the government’s crackdown on corporate wrongdoing.

Lay died of heart failure in July 2006 before he could be sentenced and his conviction on 10 counts of fraud, conspiracy and banking violations was thrown out because his death prevented him from appealing the verdict.

Skilling, who became the poster child for corporate malfeasance, appealed his May 2006 conviction by challenging the federal law that punishes executives who fail to provide “honest services.”

His lawyers argued that the statute is “vague and unenforceable” and does not require proof that the accused received a personal gain from the alleged fraud.